The AUD/USD has increased sharply and has reached new highs, has rallied because the Chinese data have come better and because the USD was too overbought on the short term. The USD’s retreat was expected after the impressive bullish run, the greenback was driven lower only by the technical factors, could increase again in the coming week as the US dollar index has edged higher again, the index remains strongly bullish despite the Thursday’s drop, has managed to stay much above the 97.58, has closed above the 98.00 psychological level, signaling that could jump much higher in the next week.
The Aussie has received a helping hand from the Chinese data, the Consumer Price Index has increased by 1.9% in September, more compared to the 1.6% estimate, the CPI continues to increase, has come better versus the 1.3% growth from August. Moreover the PPI has increased by 0.1% , has come better than the -0.4%, the economic indicator was in the negative territory after March 2012, the positive data have boosted the Aussie on the short term.
The USD remains strong, even if the United States economic data have come in mixed, the Core Retail Sales have increased by 0.5%, more compared to the 0.4% estimate, has surged again after the 0.2% drop from the last reading period, while the Retail Sales have surged by 0.6% in September, matching expectations. Moreover the PPI rose by 0.3% in September, has beaten the 0.2% forecast, while the Core PPI has increased by 0.2%, more than the 0.1% prediction. Unfortunately for the USD, the Prelim UoM Consumer Sentiment has decreased from 91.2 to 87.9 points, despite that the estimate was 92.1. The Business Inventories have disappointed as well because have dropped by 0.2% more compared to the 0.1% estimate. The USD has increased in the last hours as the Federal Budget Balance has increased unexpectedly higher, from -107.1B to 33.4B.

The rate has increased sharply and has jumped again above the 0.7640 level, has rallied aggressively and has managed to jump above the 50% Fibonacci line, has failed once again to stay below the 50% line, the rate was driven higher by fundamental factors, the rate outlook remains bearish as long as is trading below the upper median line (uml) of the major descending pitchfork, the major downside target remains at the lower median line (LML) of the major ascending pitchfork.

The rate has found resistance again at the upper median line (uml) of the minor descending pitchfork, actually has failed to close right on this level and now is expected to drop sharply toward the minor median line (ml), could be attracted by the confluence area formed at the intersection of the median line (ml) with the 50% Fibonacci line.

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